The Indian government recently announced the GDP in the third quarter of 2023 (July-September), with a year-on-year growth rate of 7.6%.This data even surpassed the predictions of the former Indian central bank, leading the world’s major economies.Agra Wealth Management

On December 8th, the Indian Central Bank announced that the growth forecast of the growth rate of India 2023/2024 (April 1, 2023 to March 31, 2024) increased from 6.5%to 7%, 2024, 2024, 2024, 2024, 2024, 2024In fiscal, inflation is expected to remain at 5.4%, and it is also announced that the maintenance rate is 6.5缚nged.

Before the meeting, the outside world generally raised the expectations of India’s fiscal year in 2024.Therefore, the statement of the Indian central bank can be said to be in the expectations of people.India’s economic policy seems to be confident, but there are also opinions that there are still obvious shortcomings in the Indian economy, and there are still many challenges.

Indian economy is bright

The Indian economy began to grow rapidly in 2021. As soon as it changed the image of "the old cow to break the car", this year continued its strong growth.When the world economy continued to face the pressure, India handed over a bright transcript, making it a "star" on the international economic stage.Agra Investment

Before the Central Bank of India, the latest forecasts for Barclays and Citi Group believed that in the 2023/2024 fiscal year, India’s GDP would increase by 6.7%, higher than the previous two predicted 6.3%and 6.2%.Morgan Stanley also raised the GDP growth forecast of India 2023/2024 from 6.4%to 6.9%.

The important basis for prediction is the prominent performance of India’s last quarter.According to official data, in the third quarter of this year, India’s GDP increased by 7.6%year -on -year, which is much higher than the previous forecast of the Indian Bank of India.

This result is mainly due to the growth of the manufacturing and construction industry, and it is also inseparable from the Modern government’s increase in government investment before the Indian election.At present, the Modi government is calling fiscal resources to promote national infrastructure construction.In the current budget of the fiscal year, the Indian government has increased capital investment for three consecutive years, with a significant increase of 33%to 10 trillion rupees (about 120 billion US dollars).

The rating agency S & P Global in the "Global Credit Outlook of 2024" released on December 4 states that India will still be the fastest growing major economy in the world in the next three years, but the report said that "whether India can become the next one in the next oneThe Global Manufacturing Center will be a major test, which is a huge opportunity. "

At present, the Indian economy is mainly guided by the service industry.India began to implement economic liberalization reform in the early 1990s. The service owner represented by the outsourcing industry dominated the development of economic development into a major feature of India’s development.However, the manufacturing industry has always been weak, and manufacturing accounts for GDP between 14%to 17%in the last decade.

The Indian government has already realized this issue.At the beginning of 2014, Modi proposed the "Indian Manufacturing 1.0" plan.In 2019, Modi proposed the "Indian Manufacturing 2.0" plan after taking office for the second time to serve as Prime Minister.

Modi’s original goal was to increase the proportion of Indian manufacturing in GDP from 15%to 25%in 2020, adding 100 million manufacturing positions, and promoting Indian goods exports to increase from 1.7%to 3.4%.But this goal has been postponed twice to 2025.

In order to further promote the goal, in March 2020, India launched the "Production Links Incentive Plan" (PLI) to select the key industries to concentrate.The Indian government provides high subsidies to companies participating in PLI, allowing India to increase domestic production in a relatively advantageous strategic sector, including forming a flexible supply chain, enhancing the competitiveness of manufacturing and improving exports.Some Indian scholars even refer to this as a "alternative Indian industry" plan.

The first phase of PLI focuses on mobile phone manufacturing, electronic parts and manufacturing.Mobile phone manufacturing is undoubtedly one of the fastest -growing departments in India’s manufacturing industry in recent years.In 2014, there were only two mobile phone production plants across India, while India’s mobile phone exports only exceeded $ 11 billion this year.In addition to mobile phones, other large multinational companies are also considering improving India’s position in its supply chain.

However, many experts point out that due to the accumulation of technology, supply chain, and labor quality, India has not yet competed with India in the traditional manufacturing industry and cannot completely replace Indian goods.

Still facing many challenges

In addition, Japan’s "Nikkei Asia Review" recently commented that although India’s GDP growth rate is considerable, it also faces many challenges behind it."What India really needs is a tolerance, sustainable growth trajectory that can promote the common prosperity of all economic departments, rather than just benefit a small number of privileges."Chennai Stock

"Large enterprises enjoy benefits, and small enterprises have increased burden." "Nikkei Asian Review" believes that "Modi Economics" relies on the employment and growth of the development of large companies to a large extent, but this makes resources more and more concentrated.In a small number of large cities, and further put pressure on municipal infrastructure, leading to rising housing, transportation, education and medical care costs.

Regarding the growth rate of GDP, "India Express" also stated on December 2 that although the manufacturing industry was driven, GDP growth exceeded expectations, but the agricultural and service industry declined.India’s "Coin News" reported that the Indian government’s expenditure increased by 12%, but the growth rate of private consumption unexpectedly slowed from 6%to 3.1%.Indian online media "connecting" said that manufacturing activities, slowing service industry, rising unemployment rate, and air pollution may challenge India’s expected economic growth in 2024.

The New York Times also inspected the Indian economy on November 20.According to the article, India is one of the lowest employment rates in the world in the world.Bloomberg quoted data from the Indian Economic Monitoring Center that India’s unemployment rate rose to 10.09%in the two years in October.India’s labor force has not increased with the growth of working age.It is reported that in the past 5 years, India’s labor population has basically stagnated more than 400 million, "and" the quality of employment is very low. "

"The wealthy Indians are booming in prosperity, while most of the other population is working hard to deal with inflation, the employment market, and the rapid decline in purchasing power." "Nikkei Asia Reviews" said that personal income tax, goods and products and products and goods and goods and productsThe increasing tax burden such as service tax and fuel tax has led many families in India to face greater economic pressure.

Therefore, when the government continues to focus the policy on the supply side, most Indians have limited purchasing power for free -range and offering products and services, which has exacerbated the overall demand and made the country’s economic momentum and and and and and and.The growth GDP number is "more fragile."

Jaipur Wealth Management